Automakers start 2013 better than last year

By Neal Morton :
February 1, 2013
: Updated: February 1, 2013 11:29pm

The Toyota logo is displayed on the grill of brand new Toyota RAV4s on the sales lot at City Toyota February 3, 2010 in Daly City, California. Toyota is being pressured by U.S. Transportation Secretary Ray LaHood who says the automaker isn't acting fast enough to fix millions of defective accelerator pedals on late model Toyota cars and trucks. LaHood retracted a statement today that Toyota owners should stop driving vehicles affected by the accelerator recall.

Photo By Harry Thomas

Automakers enjoyed a strong start to the year, as Detroit’s Big Three posted double-digit sales gains in January compared to the same month last year. Toyota soared past every competitor as its hybrid Prius family recorded its best January performance ever.

Many automakers in January racked up their strongest monthly performance in years, thanks to the end of fiscal cliff talks in Washington, D.C., and aging fleets of vehicles across the country.

Toyota Motor Corp. again outpaced its competitors with a 27 percent gain in new car and truck sales in January, compared with the same month last year. Ford Motor Co. trailed slightly with a 22 percent gain, while the other Detroit manufacturers, Chrysler Group LLC and General Motors Co., posted 16 percent increases in monthly sales.

Honda Motor Co., the only other foreign automaker to report double-digit growth, recorded a gain of 13 percent.

Last month gave the industry its best start to the year since 2008, said Bill Fay, U.S. sales chief for the Toyota brand.

“I think all in our industry were encouraged that the sales pace we saw in the fourth quarter of last year rolled right into January, exceeding expectations for our industry,” Fay said in a conference call. “That's especially good news because we all started the year with a little bit of apprehension, with the fiscal cliff debates and some of the new tax rates and January normally being a slower month ...”

The strong January numbers came even after a 2 percent cut in Social Security taxes expired on Jan. 2, reducing take-home pay for most Americans.

January sales could have been even higher without the tax increase, said Jesse Toprak, senior analyst with car-pricing site TrueCar.com. He said the higher tax levy is costing the average new-car buyer — those with a household income between $70,000 and $100,000 a year — around $300 per month.

“That's almost a car payment,” Toprak said.

But aging vehicles prompted many consumers to take advantage of low interest rates and looser credit terms.

In particular, automakers enjoyed a flood of businesses replacing aging pickups that they kept through the Great Recession.

“Pickup truck sales are gaining on the strength of an improving housing market and the unleashing of pent-up demand,” said Michelle Krebs, a senior analyst with Edmunds.com, an auto-information site.

At 3,407 units, Ford truck sales in January climbed 28 percent year over year in the Houston region, which includes Austin and San Antonio, according to the company.

“These vehicles are the volume sales and profit generators for Detroit manufacturers,” Krebs said in a statement, “so this has tremendous significance for the auto industry and the economy overall.”

Similarly, every Toyota truck model showed sales growth, including the San Antonio-made Tacoma and Tundra pickups. The automaker sold 31 percent and 27 percent more Tacomas and Tundras, respectively, last month compared with January 2012.

While Fay said trucks continue to do well on consumer shopping lists, he acknowledged rising gas prices could spark more interest in smaller, more fuel-efficient vehicles.

However, Toyota could stir up interest among potential truck buyers when it unveils a remodel of the Tundra at the Chicago Auto Show on Thursday. The Japanese company has released few details about the redesign, but Fay said production should start in fall.